Good Jobs: Why Innovation, Location And Education Matter Most

A new book was released today by University of California at Berkeley Economics Professor and Fulbright Fellow, Enrico Bonetti, titled The New Geography Of Jobs. This young economist's research has some surprising news about jobs, and it starts with where we live.

The following is an interview with Professor Bonetti; ten questions about why innovation, location and education matter most.

1. What is the New Geography of Jobs?

If you look at the economic map of America today, you do not see just one country. You see three increasingly different countries. On one hand there are cities like Seattle, San Francisco, Raleigh-Durham or Austin, with a strong innovation-based economy and workers who are among the most creative and best paid on the planet. At the other extreme are former manufacturing centers like Detroit, Flint or Cleveland, where jobs and salaries are plummeting. In the middle, there is the rest of America, apparently undecided on which direction to take.

The difference between the three Americas was small in the 1980’s and has been growing ever since. My book explores this new geography of jobs, and especially its root causes and what it means for our country.

2. In the last two years, American manufacturing has been doing very well. Even the car companies are hiring. But you seem pessimistic about the future of American manufacturing. What’s so wrong about manufacturing? And what is so special about the innovation sector?

The last two years have been good years for manufacturing employment. But they are the exception. The previous two years have been terrible. More in general, for the past 30 years, we have been losing an average of 370,000 jobs per year in manufacturing, and not just during recessions. This trend reflects the adoption of new technologies that make production of physical good increasingly automated. For example, for each car produced, GM today needs 70% fewer workers than in 1950. American manufacturing companies produce today more goods than in 1980, but they only need a fraction of the workers. I do not think these trends are likely to change in any significant way.

By contrast, the innovation sector is growing, both in terms of jobs and salaries. For example, jobs in the Internet sector have been growing 200 faster than the rest of the labor market. For all the talk about outsourcing, software is also growing. And it is not just high tech:

3. You write a lot about the importance of high tech and innovation for American jobs. But not everyone can work at Google or Apple. What about the rest of us? Where are the jobs for the average American supposed to come from?